Chloe Chambraud and Jenny Lincoln, the Policy and Research team at Business in the Community's gender equality campaign, call on organisations to, and offer guidance on, publishing gender pay gap data before legislation comes into force.
“Over the next few months, you have a window of opportunity in which you can be amongst the first employers to be bold – to be the leaders in pay transparency. Be on the front foot, because when the regulations come into force, transparency will no longer be a unique selling point.” Kathryn Nawrockyi, Gender Equality Director, Business in the Community
Just a few days after the government’s announcement to include bonuses in the mandatory gender pay gap reporting, our members attended a roundtable to discuss both the challenges and opportunities of early publication. Hosted by Accenture, we were delighted to have a full room of members last week – many keen to publish before the regulations come into force. Our members acknowledge this move towards transparency as a positive step towards gender equality in the workplace, yet they are nervous about the challenges facing them in the reporting process.
The most common challenges facing our members:
Calculating the gender pay gap. Deciding which data to publish is a key concern for employers, which is exacerbated by the current lack of clarity around the possible direction of the regulations. For example, the definition of “employee” remains an issue for businesses employing large numbers of contingency workers or partners. Calculating the pay gap for each pay grade also poses problems, as some members have highly complex grading systems, whilst others don’t have any at all. Global companies face particular issues calculating individual country data.
Raising awareness amongst staff. Our members are concerned that employees might confuse the ‘gender pay gap’ with ‘unequal pay’. While the gender pay gap is the difference between the average pay of women and men in an organisation, unequal pay refers to women being paid less than men for doing work of equal value. Distinctly different issues, these two terms are often used interchangeably, even in the media. Many employers are afraid this misconception will reduce staff morale or lead women to lodge discrimination complaints. We hope this is unlikely - our survey of more than 1,000 employees shows that less than 1% of employees would react by taking legal action against their employer.1
Communicating ‘the bigger picture’ and closing the gap. One of the key drivers behind the gender pay gap is occupational segregation - the uneven distribution of women and men across the organisation, often resulting from a history of social stereotyping and conditioning. However, members want to know which factors drive the gender pay gap in their organisation to come up with a relevant narrative and effective action plan. They need the tools to help them investigate the causes, educate their employees and senior executives, and close the gap.
Despite the challenges, transparency leads to opportunity.
“Employees want to know the truth; employers can use that to their advantage to build trust and loyalty.” Kathryn Nawrockyi
Employees care about gender pay gap transparency, and, contrary to what many employers believe, publishing your data is unlikely to result in a rush of law suits. Employees are far more interested in the contextual narrative around the pay gap and how their employer plans to close it. In fact, our survey shows that 89% of employees would feel more positively towards their employer if they published their data along with an action plan to close the gender pay gap[ii].
Our research also shows that employees already believe there is a gender pay gap and over half of the respondents think there may be unequal pay in their organisation. Being transparent with your data and communicating a clear narrative could help alter these perceptions, as well engage your staff and attract new talent. Use future gender pay gap reporting as an opportunity to measure and promote your existing diversity and inclusion work, particularly those initiatives which aim to improve the gender balance of your workforce.
We are calling for employers to volunteer their gender pay data before public transparency becomes compulsory. Change is coming regardless, and so now is the time to be a pioneer. By holding yourself publicly accountable you will enhance your corporate reputation, attract and retain the best talent. Recent research by Global Tolerance based on a sample of 2,000 people shows that three quarters of respondents want to see more transparency and 81% more accountability with businesses, government and non-profits[iii]. Being a leader in volunteering gender pay data is part of this move towards greater openness, trust and responsibility.
Large employers are expected to be legally required to publish their gender pay gap from late 2016 - taking action now to be open and upfront about your data could fuel your competitive edge in the employment market.